Confidentiality clauses have no place in big-money state contracts

Sunday

Jul 15, 2012 at 12:01 AM

S.C. Treasurer Curtis Loftis is correct to insist that more state officials review the investment contracts agreed to by the S.C. Retirement Investment Commission. A board that oversees billions in public money needs oversight.

S.C. Treasurer Curtis Loftis is correct to insist that more state officials review the investment contracts agreed to by the S.C. Retirement Investment Commission. A board that oversees billions in public money needs oversight.Loftis, a member of the commission, had to vote on one of the contracts the commission was signing, but he said he did not have the time to go over the lengthy, complex document or the experience to fully evaluate it. He wanted his staff and attorneys to review the contract.But the contract was subject to a confidentiality agreement that barred his staff from seeing it.It is unreasonable that the commission would agree to provisions that prohibit the treasurer from using his staff and attorneys to advise him in performing his official duties. But it is truly mind-blowing that a commission whose job is to oversee the handling of more than $25 billion, yes billion with a “b,” would agree to make its contracts confidential.Commission officials say that commission staff and attorneys review the contracts, but Loftis correctly pointed out that this isn’t good enough. “If only the (commission) itself provides oversight, then do we have oversight?” Loftis told The State newspaper. “I’ve never seen anyone who thinks they shouldn’t have anyone looking over their shoulder.”The treasurer is particularly correct about a commission that invests billions in state retirement funds. Some of that money comes from taxpayers. Some of it comes from state employees. The commission is investing other people’s money, and it needs to be fully accountable.If the commission and its employees are the only ones examining these investment contracts, how do state residents and state employees know the contracts represent their best interests? How do they know the commission isn’t giving away retirement fund money in order to get favors or kickbacks elsewhere? They don’t.Only genuine oversight and accountability will give taxpayers and state employees the assurances they need. And that isn’t possible if the commission agrees to confidentiality clauses that prohibit even state officials from reviewing contracts.The governor gets it. “The treasurer has a legitimate concern,” Nikki Haley told The State. “He has the right if he is putting his signature on there to be able to have staff to give him the confidence that what he is doing is right for the people of the state.”State agencies and commissions, particularly those that oversee massive amounts of public money, need more oversight, not less. Lawmakers should look at encoding that oversight in state law and limiting the ability of public bodies to enter into confidentiality agreements.